A lot of ideas have been tossed around as investors and cryptocurrency firms have tried to find a way to dig themselves out of the very deep hole they are currently stuck in. At this time, a possible solution to the crypto crash is yet to be found.
This does not mean that there is no hope for those who have thousands of dollars tied up in digital assets, though. Ethereum, in particular, has been working on a plan to try and salvage what is left of the crypto market, and perhaps even turn the situation around.
However, whether this new plan will work remains to be seen. Recently, the crypto market has not been kind to new strategies. Each week, it seems the market slides down a few extra notches, and these past few days have not been any different.
Sudden Market Drop Hits BTC Hard
This week has seen the value of BTC plummet from $22,738 to below $21,123, the lowest it has been in the last three weeks. Ether was not far behind. The world’s second-largest crypto coin fell from $1,808 to $1,728 within the same period.
Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown, said that this latest drop seems to be something more than just a simple flash crash. The currencies did not immediately rebound as was expected but continued sliding down further in the hours that followed the initial drop.
She went on to say that it seems likely that a sudden large-scale transaction was the main reason behind the drop in value. The plunge was sparked by large sales of Cardano stock, which was quickly followed by both Bitcoin and Ethereum.
How Does Ethereum Plan To Survive?
While this drop is significant enough to grab the attention of crypto investors, it is nothing new considering how digital assets have been performing recently. It has been quite clear for months now that crypto investments were in big trouble.
There is obviously a need for a long-term solution to the biggest market problems which have been blamed for the crypto crash, such as widespread scamming, hacking, and a general lack of intrinsic value exhibited by most digital assets.
With this in mind, the developers of Ethereum think they may hold the key to the problem. They have been diligently working on what they call a “Greener Crypto” for a while now. The project is only a few weeks from completion.
This new proof-of-stake approach to investing in ETH is a move away from the more traditional proof-of-work system employed by most digital currency developers. What Ethereum proposes is an incentive-based approach to attract investors.
The basics involve rewarding people who invest in at least 32 ETH by making them validators and allowing them a chance to receive ETH in return for their cooperation and loyalty. This approach is designed to reward those who actively promote the platform and at the same time make it very risky for those trying to cheat the system.
Thus far, this new idea is being tested on a separate blockchain, called the Beacon Chain, with Ethereum reporting that $25 billion worth of ETH has already been stacked there, with plans to merge it with the main blockchain in the next few weeks.
The hope is that this new approach would cut Ethereum’s energy use by almost 99.9%, making its activities similar to any other normal computer processing operations. This would have a very positive impact on reducing the massive carbon footprint that has been blamed on crypto mining by its detractors.
How this new approach by Ethereum will work out is yet to be seen, but already there have been rumblings about some safety concerns, especially considering the sharp increase in online hacker activities in the past few months. Proof-of-stake has not been as widely used as proof-of-work, meaning that its resilience against external attacks is yet to be truly tested.
There are only a few more weeks till Ethereum unveils its grand plan, and investors will be eagerly waiting to see if perhaps this is the lifeline they so desperately needed.
ChesWorkShop commits to presenting fair and reliable information on subjects including cryptocurrency, finance, trading, and stocks. However, we do not have the capacity to offer financial guidance, advocating instead for users to conduct their own diligent research.